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2014 (6) TMI 373 - HC - Income TaxGarnishee notice issued for FDRs Deposits yet to mature Liability to pay for the proceeds Held that:- There is no lockin period insofar as fixed deposit of the assessee is concerned - the period of fixed deposit is stipulated in the fixed deposit receipts, it does not prevent the depositor namely assessee to seek for premature withdrawal of the fixed deposit - he or she as the case may be has to forego the interest for the remaining period and also in view of the fact that the guidelines issued by the Reserve Bank of India enabling the depositors to withdraw the fixed deposit prematurely they can withdraw the amounts deposited by them prematurely Relying upon VYSYA BANK LTD., VS. JOINT COMMISSIONER OF INCOME TAX AND ANOTHER [1999 (8) TMI 26 - KARNATAKA High Court] - jurisdiction to attach the fixed deposit by the Department and obligation of the Bank to make payment of the amount even before maturity of the fixed deposit receipts cannot be found fault with. The assessee did not file objection to the Garnishee notice issued u/s 226 (3)(1) by raising an objection as required u/s 226 (3) (vi) and for this precise reason and also for the reason that the assessee-Bank did not dispute the relationship between it and the assessees including Shivaganga Multi-purpose Co-operative Society Limited it enabled the Department to arrive at a conclusion that petitioner is to be treated as an assessee in default and accordingly an order came to be passed u/s 226 (3) (x) - the assessee does not dispute about deposits held by it on behalf of the assessee and the same being payable by the assessee to the assessee and non-compliance of the demand notice raised by the Department u/s 226 (3), revenue have rightly held that assessee is to be treated as an assessee in default - There is no infirmity in the order passed by the revenue calling for exercise of extra-ordinary jurisdiction - whatever the amounts that are held by the assessee either on behalf of the assesee or on behalf of M/s Shivaganga Multi-purpose Co-operative Society Limited ultimately payable to assessees would be the amounts payable by the assessee to the Department Decided against Assessee.
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